Electricity, Health and the Environment:
Comparative Assessment in Support of Decision Making
Policy level
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System level Project level I
Electricity planning perspective Planner's viewpoint
Screening Expansion I
planning Project I
design
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and qualitative type analysis
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Proceedings of an International Symposium Vienna, 16-19 October 1995
ESCAP IAEA
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OECD/NEAÎIS (Sil A
UNIDOa pyramid.
The different levels of the planning process are represented vertically. Ever more detailed information analyses are required a s the planner moves from top to bottom. First, at the policy level, general characteristic data and analysis provide decision makers with a broad understanding of the options available, giving the pros and cons of economic, health and environmental aspects of various electric power technologies and associated policies. Second, the system level requires a more detailed understanding of electric power systems, forecasting the rate of growth in electricity demand to meet capacity expansion requirements with different fuel options and generating plant candidates. Analyses at this level include traditional least cost planning techniques, and methods of evaluating the health, environmental and social costs resulting from selected expansion strategies. Third, at the project level, analyses are highly specific, calling for ever more detailed data on project costs, emissions and other burdens resulting from plant construction and operation.
This final analysis must be aligned with policy and system levels, otherwise there is the risk of failing to account for broad policy issues and their impact on existing and future power plants in the total system.
Horizontally, each level represents the increasing complexity, comprehensive- n e s s of analysis, and degree of uncertainty in the information provided. The available technologies range from proven technologies, e.g. fossil fuel and nuclear energy systems, to state of the art, new and emerging technologies, e.g. clean coal technolo- gies, advanced nuclear power plants and renewable energy systems under develop- ment. The parameters related to health and environmental aspects range from quantitative information on emissions to qualitative effects on landscape, quality of life and s o on. The complexity óf the analysis ranges from conventional methods for cost comparisons to more advanced methods such a s multicriteria techniques for incorporating quantitative and qualitative environmental indicators.
AND THE ENVIRONMENT:
COMPARATIVE ASSESSMENT IN SUPPORT OF
DECISION MAKING
AFGHANISTAN HUNGARY PERU
ALBANIA ICELAND PHILIPPINES
ALGERIA INDIA POLAND
ARGENTINA INDONESIA PORTUGAL
ARMENIA IRAN, QATAR
AUSTRALIA ISLAMIC REPUBLIC OF ROMANIA
AUSTRIA IRAQ RUSSIAN FEDERATION
BANGLADESH IRELAND SAUDI ARABIA
BELARUS ISRAEL SENEGAL
BELGIUM ITALY SIERRA LEONE
BOLIVIA JAMAICA SINGAPORE
BOSNIA AND JAPAN SLOVAKIA
HERZEGOVINA JORDAN SLOVENIA
BRAZIL KAZAKHSTAN SOUTH AFRICA
BULGARIA KENYA SPAIN
CAMBODIA KOREA, REPUBLIC OF SRI LANKA
CAMEROON KUWAIT SUDAN
CANADA LEBANON SWEDEN
CHILE LIBERIA SWITZERLAND
CHINA LIBYAN ARAB JAMAHIRIYA SYRIAN ARAB REPUBLIC
COLOMBIA LIECHTENSTEIN THAILAND
COSTA RICA LITHUANIA THE FORMER YUGOSLAV
COTE D'IVOIRE LUXEMBOURG REPUBLIC OF MACEDONIA
CROATIA MADAGASCAR TUNISIA
CUBA MALAYSIA TURKEY
CYPRUS MALI UGANDA
CZECH REPUBLIC MARSHALL ISLANDS UKRAINE
DENMARK MAURITIUS UNITED ARAB EMIRATES
DOMINICAN REPUBLIC MEXICO UNITED KINGDOM OF
ECUADOR MONACO GREAT BRITAIN AND
EGYPT MONGOLIA NORTHERN IRELAND
EL SALVADOR MOROCCO UNITED REPUBLIC
ESTONIA MYANMAR OF TANZANIA
ETHIOPIA NAMIBIA UNITED STATES OF AMERICA
FINLAND NETHERLANDS URUGUAY
FRANCE NEW ZEALAND UZBEKISTAN
GABON NICARAGUA VENEZUELA
GERMANY NIGER VIET NAM
GHANA NIGERIA YEMEN
GREECE NORWAY YUGOSLAVIA
GUATEMALA PAKISTAN ZAIRE
HAITI PANAMA ZAMBIA
HOLY SEE PARAGUAY ZIMBABWE
T h e A g e n c y ' s Statute was approved on 23 October 1956 by the C o n f e r e n c e on the Statute of the I A E A held at United Nations Headquarters, N e w York; it entered into force on 29 July 1957. T h e Head- quarters of the Agency are situated in Vienna. Its principal objective is " t o accelerate and enlarge the contribution of atomic energy to peace, health and prosperity throughout the w o r l d " .
© I A E A , 1996
Permission to reproduce or translate the information contained in this publication may be obtained by writing to the International Atomic Energy Agency, W a g r a m e r s t r a s s e 5, P . O . Box 100, A - 1 4 0 0 Vienna, Austria.
Printed by the I A E A in Austria J u n e 1996
S T I / P U B / 9 7 5
ELECTRICITY, HEALTH AND THE ENVIRONMENT:
COMPARATIVE ASSESSMENT IN SUPPORT OF
DECISION MAKING
PROCEEDINGS OF A SYMPOSIUM ON ELECTRICITY, HEALTH AND THE ENVIRONMENT:
COMPARATIVE ASSESSMENT IN SUPPORT OF DECISION MAKING
JOINTLY ORGANIZED BY THE EUROPEAN COMMISSION (EC), ECONOMIC AND SOCIAL COMMISSION
FOR ASIA AND THE PACIFIC (ESCAP),
INTERNATIONAL ATOMIC ENERGY AGENCY (IAEA), INTERNATIONAL INSTITUTE
FOR APPLIED SYSTEMS ANALYSIS (HASA),
NUCLEAR ENERGY AGENCY OF THE OECD (OECD/NEA), ORGANIZATION OF
PETROLEUM EXPORTING COUNTRIES (OPEC), UNITED NATIONS ENVIRONMENT PROGRAMME (UNEP),
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION (UNIDO), WORLD BANK/INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (IBRD), WORLD METEOROLOGICAL ORGANIZATION (WMO), AND HELD IN VIENNA, AUSTRIA, 16-19 OCTOBER 1995
INTERNATIONAL ATOMIC ENERGY AGENCY VIENNA, 1996
Symposium on Electricity, Health and the Environment: Comparative Assessment in Support of Decision Making (1995 : Vienna, Austria)
Electricity, health and the environment: comparative assessment in support of decision making : proceedings of a Symposium on Electricity, Health and the Environment: Comparative Assessment in Support of Decision Making / jointly organized by the European Commission (EC), ... [et al.]. — Vienna : International Atomic Energy Agency, 1996.
p. ; 24 cm. — (Proceedings series, ISSN 0074-1884) STI/PUB/975
ISBN 92-0-102496-7
Includes bibliographical references.
1. Electricity—Environmental aspects—Congresses. 2. Electricity- Health aspects—Congresses. 3. Power resources—Environmental aspects—Congresses. 4. Power resources—Health aspects—Congresses.
I. International Atomic Energy Agency. II. Commission of the European Communities. III. Title. IV. Series: Proceedings series (International Atomic Energy Agency).
VICL 96-00149
The Symposium on Electricity, Health and the Environment: Comparative Assessment in Support of Decision Making, was held from 16 to 19 October 1995 at the IAEA Headquarters in Vienna. It was organized jointly by the IAEA and nine other international organizations — the European Commission (EC), the Economic and Social Commission for Asia and the Pacific (ESCAP), the International Institute for Applied Systems Analysis (HASA), the Nuclear Energy Agency of the OECD (OECD/NEA), the Organization of Petroleum Exporting Countries (OPEC), the United Nations Environment Programme (UNEP), the United Nations Industrial Development Organization (UNIDO), the World Bank/International Bank for Reconstruction and Development (IBRD) and the World Meteorological Organiza- tion (WMO). About 200 experts from 53 countries and 16 different organizations took part.
The Symposium was convened as part of the inter-agency joint project on data- bases and methodologies for comparative assessment of different energy sources for electricity generation (DECADES). It was opened with an address by Dr. Hans Blix, Director General of the IAEA, followed by opening statements from the EC, IBRD, UNEP, UNIDO, WMO and the Chairman of the DECADES Project Steering Committee, Mr. B.A. Semenov (Deputy Director General of the IAEA).
The main objective of the Symposium was to enhance and strengthen informa- tion sharing and co-operation between interested and affected parties in the field of electricity demand analysis and supply planning, aiming at implementing sustainable policies in the power sector, taking into account economic, social, health and environmental aspects. To meet this objective, the Symposium sessions addressed the following topics: key issues in the decision making process; assessment of health and environmental impacts; integrated framework for comparative assessment;
implementation of comparative assessment; country case studies; and comparative assessment in decision making. A closing round table focused on challenges for international co-operation aiming at implementation of sustainable electricity policies. In addition to the main sessions, poster presentations illustrated results from comparative assessment studies carried out in different countries, and software demonstrations provided opportunities for participants to gain information about state of the art computer tools, databases and analytical models that are available for use in decision support studies.
The first technical session of the Symposium set the stage by highlighting the key issues to be addressed for implementing sustainable electricity policies in developing countries, countries in transition and industrialized countries. Session 2 focused on the assessment of health and environmental impacts of different energy systems. Session 3 dealt with the formulation of integrated frameworks for compara- tive assessment in the context of analysing local, regional and global issues.
tion of comparative assessment in various projects and reported results from a number of comparative assessment case studies that had been carried out in different countries and organizations using various tools. In the final technical session, the experience with implementing comparative assessment as an integral part of the decision making process was reported in four papers.
The closing round table discussed the main issues that emerged during the Symposium, which were highlighted by the rapporteurs for the respective sessions.
Active discussions with the participants allowed the organizers of the Symposium to draw some main findings and conclusions, as well as to provide some recommen- dations for follow-up actions that could be undertaken in the framework of the DECADES project.
The IAEA wishes to acknowledge the support of the sponsoring organizations, the valuable contributions of the authors and presenters of papers, posters or soft- ware demonstrations, chairpersons and scientific secretaries, as well as the assistance and efforts of the Programme Committee.
EDITORIAL NOTE
The Proceedings have been edited by the editorial staff of the IAEA to the extent considered necessary for the reader's assistance. The views expressed remain, however, the responsibility of the named authors or participants. In addition, the views are not necessarily those of the governments of the nominating Member States or of the nominating organizations.
Although great care has been taken to maintain the accuracy of information contained in this publication, neither the IAEA nor its Member States assume any responsibility for consequences which may arise from its use.
The use of particular designations of countries or territories does not imply any judgement by the publisher, the IAEA, as to the legal status of such countries or territories, of their authorities and institutions or of the delimitation of their boundaries.
The mention of names of specific companies or products (whether or not indicated as registered) does not imply any intention to infringe proprietary rights, nor should it be construed as an endorsement or recommendation on the part of the IAEA.
The authors are responsible for having obtained the necessary permission for the IAEA to reproduce, translate or use material from sources already protected by copyrights.
Material prepared by authors who are in contractual relation with governments is copyrighted by the IAEA, as publisher, only to the extent permitted by the appropriate national regulations.
OPENING SESSION
Opening Statements
H. Blix 3 E. Andreta, P. Valette 11
R. Stern 15 J. Aloisi de Larderel 23
A. Tcheknavorian-Asenbauer 31
G.O.P. Obasi 35 B.A. Semenov 43
KEY ISSUES IN THE DECISION MAKING PROCESS (Session 1)
Sustainable electricity policies: The role of international co-operation
(IAEA-SM-338/11) 51 K. Leydon
Major issues of electricity generation in developing countries
(IAEA-SM-338/12) 59 H. Khatib
The power system in Russia and the role of nuclear power
in the transition to market economy (IAEA-SM-338/13) 75 L.D. Ryabev, Yu.F. Chernilin
Policy options to limit C 02 emissions from electricity supply:
An OECD perspective (IAEA-SM-338/14) 93 J. Ellis, S. Peake
The process of building consensus in power development:
A methodology for the involvement of indigenous people
in decision making (IAEA-SM-338/17) 109 R. Lanari
ASSESSMENT OF HEALTH AND ENVIRONMENTAL IMPACTS (Session 2)
Issues of data collection and use for quantifying the impacts of energy installations and systems (IAEA-SM-338/21) . B. Serensen
123
rural economic development in China (IAEA-SM-338/22) 139 Junfeng Li, Lin Dai, Litong Xu
Potential environmental impacts associated with the construction
and operation of hydropower plants (IAEA-SM-338/23) 153 N.P. Villela
Psychosomatic and substitutional effects: Comparative health risks
from electricity generation (IAEA-SM-338/24) 177 N. Pop-Jordanova, J. Pop-Jordanov
Assessment of health impacts of electricity generation and use
(IAEA-SM-338/25) 189 S.C. Morris
External costs of electricity: Valuation of health impacts
(IAEA-SM-338/26) 199 A. Markandya
INTEGRATED FRAMEWORKS FOR COMPARATIVE ASSESSMENT (Session 3)
Integrating energy and environment: Analytical framework
and applications (IAEA-SM-338/31) 217 M. Munasinghe
Framework for and current issues in comprehensive comparative
assessment of electricity generating systems (IAEA-SM-338/32) 245 S. Hirschberg
Life cycle analysis of electricity generation and supply systems:
Net energy analysis and greenhouse gas emissions (IAEA-SM-338/33) ... 279 Y. Uchiyama
Energy chain analysis for comparative assessment in the power sector
(IAEA-SM-338/34) 293 I.F. Vladu
Integration of qualitative and quantitative indicators in comparative
risk assessment (IAEA-SM-338/35) 323 M.J. Chadwick, S.-O. Ryding
Integrated economy/energy/environment models (IAEA-SM-338/36a) 343 P. Capros
Achievements and results of the ExternE project (IAEA-SM-338/36b) 367 N.J. Eyre, J.E. Berry
Some transboundary environmental issues of public concern
(IAEA-SM-338/37) 387 R. Wilson
(Session 4)
Comparative assessment in power sector decision support studies:
Findings from the DECADES project (IAEA-SM-338/41) 405 L. Bennett, E. Bertel, M. Derrough
Progress report on case studies carried oiit within the United Nations Development Programme for Asian co-operation on energy and
the environment (PACE-E) (IAEA-SM-338/42) 417 T. Lefevre
The Environmental Manual for Power Development: Status and results from case studies in the Philippines, Poland and Morocco
(IAEA-SM-338/43) 429 T.C. Herberg, U.R. Fritsche
The SEI/UNEP fuel chain project: Using the LEAP/EDB modelling system for fuel chain analysis in developing countries
(IAEA-SM-338/45) 451 C. Heaps, M. Lazarus, D. Hill, G. Mackenzie
Assessment of environmental issues using SUPER-OLADE/BID for comparing alternative electricity system expansion strategies:
A case study for Colombia (IAEA-SM-338/46) 467 R. Campo, E. Angel, D. Gómez, O.E. León
IMPLEMENTATION OF COMPARATIVE ASSESSMENT Country Case Studies
(Session 5)
Evaluation of policy measures to control carbon dioxide
emissions in Sweden (IAEA-SM-338/51) , 477 T. Larsson, B. Rydén, H. Sköldberg
Possible role of nuclear power in reducing environmental emissions
from future electricity generation in Pakistan (IAEA-SM-338/52) 487 A.M. Khan, A.I. Jalal, A. Mumtaz, G.R. Athar
Comparative assessment of alternative electricity supply strategies in Romania: Results of a case study carried out using the
DECADES computer tools (IAEA-SM-338/53) 501 A. Popescu, D. Popovici, F. Breazu, M. Popescu
Economic and environmental implications of incorporating C 02
abatement policy measures into the Indian power system:
A modelling approach (IAEA-SM-338/54) 513 A. Dos
nuclear programme (IAEA-SM-338/55) 525 M. Vielle
Impact of incorporating environmental externalities on electric
resource planning: Selected case studies (IAEA-SM-338/56) 537 J. Geidl, S. Kanhouwa
The C 0 2 D B inventory and its application in a comparative
assessment of electricity end use options (IAEA-SM-338/57) 561 S. Messner
COMPARATIVE ASSESSMENT IN DECISION MAKING (Session 6)
Ontario Hydro's experience in linking sustainable development,
full cost accounting and environmental assessment (IAEA-SM-338/61) ... 575 C. Boone, H. Howes, B. Reuber
Electricity and policy in South Africa affecting energy demand
and supply (IAEA-SM-338/62) 591 R. K. Dutkiewicz
Climate change mitigation strategies in Germany: Findings from
the IKARUS project (IAEA-SM-338/63a) 601 D. Martinsen, W. Kuckshinrichs, P. Markewitz, J.-F. Hake
Climate change mitigation strategies in Germany: Integrated dynamic
approach to the year 2020 (IAEA-SM-338/63b) 611 P. Schaumann, S. Molt, E. Läge, W. Rüffler, U. Fahl, A. Voss
POSTER PRESENTATIONS
Environmental impacts of the power system: Case study
for Argentina, 1990-2010 (IAEA-SM-338/71P) 621 C.E. Suárez, N. Di Sbroiavacca, A. Dobrusin, G. Hasson
Analysis of environmental aspects of electricity generation
options in Bulgaria (IAEA-SM-338/72P) 636 A. Iotova
Assessment of the potential role of nuclear and other options
for power generation in Croatia (IAEA-SM-338/74P) 647 D. Feretic, Z Tomsic, Z. Simic
Environmental impacts of electricity generation options and
strategies in Egypt (IAEA-SM-338/75P) 651 S.M. Rashad, M.A. Swidan, F.H. Hammad, F. Abuo Neama,
N.N. El Gawli, A.A. Emara
V. Tort, M. Dreicer
Health risks of energy systems (IAEA-SM-338/78P) 673 W. Krewitt, R. Friedrich
Environmental impacts arising from electricity interchanges
between Greece and neighbouring countries (IAEA-SM-338/80P) 685 G.C. Contaxis, К. Perrakis, J. Kabouris, G. Korres, S. Vassos
Assessment of alternative electricity system expansion strategies
for Hungary (IAEA-SM-338/81P) 698 J. Hoffer, P. Dörfner
Risk assessment: The need for equivalence of evaluation methodologies
(IAEA-SM-338/82P) 713 L. Noviello
Electric system expansion plan for the Republic of Korea
considering C 02 emission control (IAEA-SM-338/83P) 720
Kidong Song, Manki Lee
Integrated resource plan of power system development in Poland
(IAEA-SM-338/84P) 731 L. Twardy, R. Krochmalski
Development of the regional capacity expansion plan in Russia:
Application of the WASP Model (IAEA-SM-338/85P) 739 Yu.F. Chernilin, S.L. Kononov, E.F. Zakharova,
V.S. Kagramanyan, A.V. Malenkov
Electricity generation alternatives in Turkey with consideration
of environmental impacts (IAEA-SM-338/86P) 763 G. Varol, S. Aktiirk
C o m p a r a t i v e a s s e s s m e n t of e n e r g y s o u r c e s f o r electricity g e n e r a t i o n
in Slovakia (IAEA-SM-338/87P) Ill J. Balajka, J. Peschl, J. Judák
Comparative assessment of the economics of nuclear power
and other options (IAEA-SM-338/91P) 792 G. Stevens
Some aspects of the destructive impact of fossil fuel combustion
and mining on the environment (IAEA-SM-338/92P) 810 J. Palige, A.G. Chmielewski
Challenges for International Co-operation (Summary of Round Table)
Summary of Round Table
Towards sustainable electricity policies:
Challenges for international co-operation 821
Chairpersons of Sessions and Secretariat of the Symposium 833
List of Participants 835 Author Index 855 Index of Papers and Posters by Number 857
Chairman H. BLIX
IAEA
H. Blix Director General,
International Atomic Ènergy Agency, Vienna
I welcome you all to this international Symposium, which addresses some topics of great concern to decision makers who have to devise policies for sustainable energy production and electricity generation. The Symposium will examine the economic, health and environmental aspects of different energy sources, and it will consider how the presently available methodologies and tools for comparative assess- ment could be adapted better to provide the types of information needed by decision makers.
I am pleased that the IAEA is hosting this Symposium, but I want to stress that it is a co-operative effort by the ten sponsoring organizations. The broad sponsorship of and the wide participation in the Symposium show that the subject matter is high on the agenda of analysts and policy makers.
As an introduction, I would like to share with you some thoughts on the oppor- tunities and challenges for the power sector, from my perspective, and also briefly describe the IAEA's activities in the field of comparative assessment.
I start from several basic premises, which may not be shared by all:
— Energy use will grow significantly, especially in developing countries. Con- tinued improvements in efficiency of energy production and use will be very important, but will by no means offset the strong growth in demand. For example, a study by China's State Science and Technology Commission esti- mates that by the middle of the next century the country's total energy demand will be some 4000 to 5000 million tonnes of coal equivalent, or about four times today's demand. This means that in 50 years' time China's energy demand will be nearly as great as the present total energy demand of all OECD countries (including the United Sates of America), which is some 6500 million tonnes of coal equivalent.
— Fossil fuels now dominate the global energy supply, and this domination can be expected to continue. For example, over the next two decades India plans to treble, and China to double, the consumption of coal for electricity genera- tion. A growing global consumption of fossil fuels is viewed as increasingly problematic, for environmental reasons, notably the risk of global warming that is linked to the increasing emissions of greenhouse gases, especially C02, from the burning of fossil fuels.
3
Solar power, wind power, biomass and other renewables (other than conven- tional, large scale hydropower) will bring a valuable, but minor, contribution to the global energy supply in the coming decades. The views expressed in one of the response strategies devised by the Intergovernmental Panel on Climate Change (IPCC) for reducing the risk of global warming, arguing that renewable energy could cover some 80% — and biomass some 50% — of the world's energy needs a hundred years from now, is viewed as completely unrealistic by many — and I think most — experts.
Nuclear fusion, as a practical source of energy, is viewed as very distant. If the world were looking for an existing, nearly economically viable technology for an almost inexhaustible electricity supply, it could have it in breeder reactors — of which several are in operation. However, while the world has been living for decades with vast quantities of plutonium ready to be exploded in bombs, it seems reluctant to accept plutonium as a fuel for electricity generation.
Expansion of nuclear power, which now provides about 7% of the world's commercial energy and 17% of its electricity, could provide at least an impor- tant part of the solution to the problem of increasing energy supply without increasing emissions. Nuclear energy contributes practically no C 02, S02 or NOx emissions. It is already today of significance in helping us to limit emis- sions into the atmosphere. If the approximately 430 nuclear power reactors operating today were replaced by coal fuelled plants, there would be an increase of more than 8% in the global C 02 emissions from energy use.
However, a broad sector of the public in many countries — especially industrialized ones — is hesitant or opposed to an increased use of nuclear power, or even a continuation at present levels. Mainly three factors prompt these attitudes: fear of accidents, fear of long lived radioactive wastes and fear that use of nuclear power might contribute to proliferation of nuclear weapons.
The last point is probably the least important. The expansion of nuclear power has not led to proliferation of nuclear weapons. Rather, we have seen a continuous increase in the number of countries committing themselves to non- proliferation. This factor and accelerating nuclear disarmament will probably reduce the link between nuclear weapons and nuclear power in the public's mind.
In general, environmentalist groups are adamantly opposed to nuclear power and urge more vigorous efforts for energy conservation, the development and greater use of renewables, and new lifestyles as means to respond to the threat of global warming. However, there are examples of different opinions among responsible and uncommitted organizations, such as the Club of Rome, which a few years ago came to the conclusion that the use of fossil fuels is probably more dangerous to society — because of the C 02 they produce — than nuclear energy.
In the face of these contradictory premises, it will be a major challenge for the energy sector and especially for the electric power sector — in both industrialized and developing countries — to get public acceptance for any policy ensuring sustainable and adequate energy supplies. For a time, and in some countries, one can try to postpone decisions in the hope that they will be less difficult later. If there is a need for more electricity, however, this option may not be available. When this need is pressing today, the decision in industrialized countries often is greater reliance on natural gas on the grounds that it is economically viable, and that it appears to be environmentally attractive since the C 02 emissions from gas are about half those from coal, per unit of energy produced. However, the leakages of methane from gas extraction sites and gas pipelines are of the order of 5-10%, which more than offsets the gains from the lower C 02 emissions.
The threat of global climate change is high on the agenda of Governments, but we have to note that — three years after the Rio 'Earth Summit' which set ambitious targets for sustainable development — the progress made worldwide, for example in reducing greenhouse gas emissions, is extremely small, not to say negligible.
Carbon dioxide emissions have slowed only marginally in industrialized countries — mainly because of the recent economic recession — and have continued to increase significantly in most developing countries, owing to energy demand growth and reliance on fossil fuels as the most readily available energy source.
Indeed, 'sustainable development' in the field of energy seems to have quite different meanings in different regions and fora, and to be difficult to put into prac- tice. The first Conference of Parties to the Framework Convention on Climate Change, which was held in Berlin at the end of March 1995, showed that reaching an international consensus on reducing greenhouse gas emissions will take some time.
The medium term outlook does not seem to be better. In particular, the expected continued dramatic growth in energy and electricity consumption in Asia will lead to a drastic increase in greenhouse gas emissions if measures are not taken soon to reduce the share of fossil fuels, especially coal, in electricity generation. In eastern Europe, energy consumption has flattened because of the economic stagna- tion that has occurred; however, as the economies of the region begin to recover and grow, these countries will also be faced with increases in emissions, unless effective control and mitigation measures are implemented. In western Europe too, according to the findings of a number of recent studies, C 02 emissions will continue to grow after the turn of the century. The mothballing of nuclear programmes in some countries and the commissioning of new gas fired or coal fired power plants are the main causes of this trend. I cannot fail to add that the case of France, where more than 75% of electricity is produced by nuclear power, clearly demonstrates that nuclear power could play a major role in reducing C 02, S02 and NOx emissions, while enhancing the economic competitiveness of the industry.
Also, a study commissioned by the Institute of Energy Economics in Japan concluded that if C 02 emissions are to be curbed to the 1990 levels, Japan will need between 160 and 300 GW(e) of nuclear power by the end of 2100. At present, Japan has 38 GW(e) of nuclear capacity.
I do not suggest that nuclear power alone can solve all of the problems involved in achieving a secure and sustainable energy supply worldwide. However, together with renewable sources and energy conservation, both of which are important, nuclear power could play a very significant role in strategies aiming towards this goal. The two cases I have just mentioned are good illustrations.
I am fully aware that the issues are fraught with emotional reactions and that Governments must pay attention to public opinion. However, it seems to me that if we have sincerely and scientifically identified some severe threats being caused by our present energy policies, we must assess and compare on a 'level playing field', i.e. rationally, all the available energy supply options — renewable, fossil and nuclear — taking into account their complete fuel cycles, their technical and eco- nomic performance, and their impact on health and the environment. This is the focus of the IAEA's programme on the comparative assessment of energy sources and also of the DECADES project within which this Symposium is organized.
Let me now give you some glimpses of the IAEA's activities in the field of comparative assessment of energy sources, in particular for electricity generation.
There is no single United Nations organization — or other worldwide inter- governmental organization — that covers comprehensively all the issues — including the social, health and environmental impacts — related to energy and electricity production and use. However, there are an increasing number of joint programmes of work which bring together the expertise and know-how of different international organizations.
The IAEA has a long tradition in the analysis and planning of energy and elec- tricity systems. In response to requests from its Member States, the IAEA has implemented and disseminated energy and electricity system analysis models that are widely used by national institutes and other international organizations. Within the Technical Co-operation Programme of the IAEA, a large number of projects are devoted to supporting Member States in the field of energy and electricity system analysis and planning. These projects examine not only the nuclear power option but also fossil and renewable energy systems. The IAEA does by no means blindly counsel the use of nuclear power. Indeed, in many cases the nuclear option would be inappropriate.
While earlier it was considered that the "cheapest energy was the best energy"
and accordingly the analysis of energy options did not have many dimensions, the increasing concern about the social, health and environmental impacts of energy production and use has led to a broadening of the analysis that is necessary. In order to assist in more comprehensive comparative assessments in the power sector, the IAEA has since the 1980s broadened the scope of its analytical activities to
incorporate those concerns together with the traditional economic and technical com- parisons. Moreover, a close co-operation on these matters has been established and maintained by the IAEA with other international organizations. The co-operation includes exchange of information, task sharing and joint activities in order to avoid duplication and to enhance the overall efficiency of the programmes carried out in the respective organizations as well as the quality and credibility of their results.
More recently, the IAEA programme has put increased emphasis on global climate change issues, especially on the potential role of nuclear power and other energy options in reducing greenhouse gas emissions. Contributions were provided to the Second Assessment Report of the IPCC. Our work in this field will continue in connection with the Framework Convention on Climate Change and with the ongoing work of the IPCC. In 1997-1998, the IAEA programme on comparative assessment of energy sources will be strengthened and redefined, building upon the results and outcomes of the current work. I trust that the presentations and discus- sions during this Symposium will provide concrete guidance on the priority issues that are to be addressed by the IAEA programme.
The present Symposium is one milestone in a continuing process of dialogue and exchange of views among experts from Member States and representatives from international organizations. It is a direct follow-up of the Senior Expert Symposium on Electricity and the Environment, which was jointly organized by the IAEA and ten other international organizations and held in Helsinki in May 1991. The Helsinki Symposium recommended inter alia that programmes of research on comparative assessment of electricity generation options and strategies should be undertaken, and stressed that international organizations having a mandate in this field should play a leading role and should co-operate to provide improved databases and methodolo- gies for comparative assessment.
The DECADES project, which is carried out jointly by nine international organizations, was initiated by the IAEA in 1992 in response to the recommendations of the Helsinki Symposium and has led to the present meeting. The objectives of the DECADES project and its main results and outcomes will be presented to you later on, in particular by the chairman of the Steering Committee for the project, Mr. Semenov. At this stage, I would like only to point out that the co-operative framework that was adopted to carry out this project has helped to ensure that there is an objective and comprehensive assessment of all energy options for electricity generation.
Coming to key issues for decision makers in the power sector, I would like, first of all, to point out that an adequate electricity supply is a prerequisite for economic development and for enhancing social welfare. The positive aspects of electricity use should not be overlooked in the process of assessing the potential negative impacts of its production. For a number of developing countries that are experiencing under-supply of electricity and power cuts — which do have significant adverse economic impacts and also social, health and environmental effects — the
priority will continue to be on adding electricity generation capacity at affordable costs. For those countries, comparative assessment includes assessing not only the potential negative impacts of different supply options but also the impacts of non-supply. You may recall that the famous Indian scientist Homi Bhabha coined the expression " n o energy is more expensive than no energy".
According to estimates published by the International Energy Agency1, elec- tricity demand in developing regions of the world is projected to grow up to the year 2010 at a rate of about 5% per year, i.e. about twice as high as the rate in OECD countries. If this demand is met, it would mean that the electricity consumption per capita would almost double, from just under 700 kW-h per capita to around 1200 kW-h per capita. Even so, this would still be less than one sixth the electricity consumption per capita in OECD countries, and in some countries the levels would be far lower. This clearly indicates that further increase in generating capacity is inevitable.
A particular question is the impact of today's energy choices on tomorrow's world. Classical thermal power plants have typical lifetimes of some 30 years, nuclear power plants of the newest generation are expected to be in operation for around half a century and hydropower plants have even longer lifetimes. Heavy metals in the wastes arising from fossil fuel burning will remain toxic forever and some radioactive wastes have to be disposed of in repositories ensuring their isolation from the biosphere over many thousands of years. Increasing C 02 concentrations in the atmosphere might entail irreversible global climate change. In view of these long term effects of energy choices, care must be taken to avoid energy policies and waste handling practices today that will lead to unacceptable effects for future generations.
In spite of the global attention that has been given to all aspects of energy supply systems, we still face major areas of uncertainty. The uncertainties surround- ing global climate change issues illustrate this point. First, there is the uncertainty about the amount of climate change that might result from rising concentrations of greenhouse gases in the Earth's atmosphere. Secondly, there are difficulties in assessing and evaluating the overall social, health and environmental impacts of global climate change, if it were to occur, in a given country or region.
Let me emphasize that nuclear power is one of the few energy sources for which the risks and potential impacts have been recognized and dealt with from its very beginning. The effects of radiation exposure due to nuclear power production are much better known — and more strictly limited — than the effects of pollutants from other energy cycles. Furthermore, the costs of minimizing these impacts are largely internalized in nuclear power generation costs. For fossil fired power plants, the emissions of S 02 and NOx can be reduced — at a considerable cost — through
1 Energy Policies of IE A Countries: 1994 Review, International Energy Agency, O E C D , Paris (1995).
the installation of scrubbing devices. In this area, I may mention that the demonstra- tion of electron beam accelerators as an advanced technique for flue-gas cleaning is being assisted by the IAEA through its technical co-operation programme.
Carbon dioxide emissions, however, cannot be controlled through economi- cally viable methods, and the assessment of the potential cost of C 02 emissions, as well as the finding of ways to include, this cost in the prices paid by consumers are particularly difficult. Other potential impacts from fossil fuel burning, for example those due to toxic heavy metals in particulate emissions and solid wastes from coal burning, also are much less well known than the effects of radiation.
This points to the urgent need for further research in the field of impact assess- ment, for evaluation of external costs and for ways to include these externalities in the prices paid for energy and electricity.
Finally, I would like to stress the transboundary aspects of national power sector policies. While decisions about using or not using any given technology are and will remain the prerogative of each country, it should be recognized that these decisions can have significant impacts beyond the country's borders. Comparative assessment frameworks should allow analysis of transboundary impacts and reflect them in the choice of optimized strategies for electricity system expansion. In this connection, international organizations can play a key role in helping to build con- sensus on global priorities, which in turn will facilitate the implementation of sustainable strategies in different countries — reflecting both regional priorities and worldwide objectives.
The issues that I have pointed out in these introductory remarks certainly are not exhaustive, and I am sure that the experts participating in this Symposium will identify and elaborate on a number of other important issues and initiate a more com- prehensive discussion on the challenges that decision makers will face in the coming years. This Symposium will not address or solve all the problems. However, I do hope that it will offer opportunities for a fruitful exchange of views between experts having a wide range of scientific backgrounds and representing different regions of the world. Moreover, I am convinced that the presentations and discussions will help to better understand the issues and to highlight ways and means for addressing them.
The findings and recommendations from the Symposium should also identify areas where further work should be undertaken by international organizations and national research institutes, with a view to a broader use of comparative assessment as a part of the decision making process for the electric power sector.
The challenge remains to design approaches that incorporate all relevant elements into a comprehensive comparative assessment of different options and strategies, and to develop enhanced databases, analytical methodologies and other decision aiding tools upon which policy makers can rely to support their decisions.
International organizations have an important role to play in helping to meet these challenges. In particular, internationally harmonized approaches — designed and
agreed upon in a co-operative framework — may help to address transboundary issues, such as acid rain, and global issues, such as greenhouse gas emissions.
I trust that these points and other issues will be discussed thoroughly during this Symposium, and I look forward to the concrete outcomes, conclusions and findings that will result from the presentations and discussions that will take place.
E. Andreta, P. Valette
Directorate General for Science, Research and Development (DG XII), European Commission,
Brussels, Belgium
Technology, and in particular research and development (R&D), is playing a major role in the issue of electricity, health and the environment, but it would be wrong to focus only on technology. It is crucial to understand also the links between electricity and the rest of the energy system and between electricity, the environment and the economy. All decisions concerning the electricity sector have very important consequences on the above mentioned areas (energy-environment-economy, E3).
There are three key factors regarding future development:
— Electricity is at the heart of modern society; the services that it provides for households and for the productive sectors reflect and illustrate the progress of the society. Electricity is also the key factor in the economic development in developing countries; two billion people in these countries have no electric facilities — a situation that will have to be changed in the future.
— Environmental issues have to be taken into account and integrated in the design of any instrument and policy; they play a role at a local level and, as recognized more recently, also at a global level.
— The institutional aspects and the role of regulation/deregulation taking place in the ongoing liberalization of the energy market are other components that have emerged and that have to be considered because they have a strong impact on the functioning of the electricity system.
These three factors are crucial for the future of the electricity system. They are central to the 'Green Paper' and the next 'White Paper' that describe the new energy policy of the European Commission (EC); they are also the main driving forces of the R&D energy strategy of the EC.
The relationships between electricity and the E3 areas are very complex and it is not possible to manage the whole system without very efficient and reliable tech- nologies on the one side and without comprehensive and robust management and planning tools on the other side. Research is playing a crucial role, for two main reasons: it provides new technologies that can be used to reconcile the issues of pressure on energy demand and resources, of emission control and of the market conditions in terms of competitiveness. Research also provides the modelling and accounting framework that is needed for a better understanding of the whole electricity-E3 system and for an optimal planning of investments.
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As regards the new technologies, there are a number of principles:
— Both supply and demand of electricity have to be considered; from an initially supply oriented R&D activity, we are moving more and more to end-use technologies. A new balance between demand and supply efforts is required in order to ensure the deployment of cost effective demand options and to strengthen the customer and market approaches that are being followed by the utilities.
— Security of supply remains a key concern; for a strategic energy source such as electricity, R&D has to provide diversified systems in order to avoid depen- dence on one type of system. R&D also has to provide flexible systems to permit rapid transfer from one source to another.
— Similar to the previous points, R&D in support of decentralized systems of production/consumption of electricity has to be strengthened: the changing regimes in the context of market liberalization, the environmental advantages of such systems and the new opportunities they offer for new energy sources, in particular renewable ones, are leading more and more to the deployment of decentralized systems.
— Finally, there is, of course, an optimal allocation to centralized systems and decentralized systems that will be implemented. So, R&D still has to improve the options of the centralized system, in particular those which represent a benefit for the environment, such as clean coal technologies.
Modelling is the second outcome of research; its status is now well established.
This is due to two reasons: first, substantial progress was made over the last few years in terms of a relevant representation of the functioning of the energy system, in terms of data and in terms of software; second, the usefulness of modelling in addressing the complex issues of the electricity system is well recognized. Today, policies cannot be presented without quantitative and in-depth analyses of their impacts on the E3 areas.
Modelling has a long tradition; nevertheless, environmental issues and their global dimension have reinforced its interest and its necessity. The Helsinki Conference and the consequent IAEA activities have illustrated this evolution; the DECADES project is a positive outcome of these activities.
The EC has also invested in modelling; the main features of its efforts are as follows:
(a) A large set of energy models has been developed. These models are well known to a large number of the participants of this symposium; they are also well established in the European countries. MEDEE and EFOM, the first generation of tools, followed by MIDAS and HERMES, are well known and I will not go into details. Nevertheless, I will emphasize the fact that such models have been or are part of the decision process for the elaboration of the
EC policies. The application of these models to the assessment of the climate change issue, the preparation of the Green Paper and the design of the R&D energy strategy was crucial and it is important to point out their usefulness.
(b) Large additional efforts have been focused during the last years on the issue of electricity, health and the environment, illustrating the importance of this area. First, a 'green accounting' method for the electricity system has been elaborated. The accounting framework of the environmental costs associated with the full cycle of the different fuels used for electricity production has been quantified both in physical and monetary terms. This activity, performed in co-operation with the United States Department of Energy, the Oak Ridge National Laboratory and Resources for the Future (RFF), which started four years ago, called ExternE, is now well established in Europe and results are being disseminated within the 15 countries of the European Union.
(c) This accounting framework is not sufficient in itself and has to be supple- mented by the development of a parallel, new modelling framework; in the jargon of modellers, it is called the 'E3 new generation' and comprises general or partial equilibrium models called SOLFEGE and PRIMES. Strong efforts have been made in this direction because this new generation of models offers many advantages: they integrate fully the environmental dimension in terms of damages and costs, in terms of behaviour and preferences and in terms of technologies; they also represent the new rules of the market and they identify the role of the actors, namely the utilities, the public authorities and the con- sumers. Such developments are crucial if we want to convince policy makers of the reliability of the figures provided by the models: they must reflect the real situation.
These new modelling tools will be discussed during the symposium; therefore, I will not go into more detail. Nevertheless, I will emphasize the use that will be made of such tools, as this will reflect real motivation.
The mandate of the Berlin meeting includes the definition of objectives and measures for the reduction of greenhouse gas emissions, which calls for intensive and wide application of models. It will be necessary to relate the climate change issue to the new emerging rules of the market; hence, it is crucial to make an in-depth assessment of the electricity issue. The EC is making strong efforts to fulfil this man- date. The study on the "Climate Change Technology Strategy within a Competitive Energy Market", together with other major studies such as "Energy 2020", should help us to define technological options and other optimal actions or instruments, taking into account the complexity of the electricity system. These studies should also help to define the R&D energy strategy of the EC for the next six years.
A logical follow-up to the evaluation of the environmental costs of energy is the question of how to internalize them in the decision making process. More research has to be done to provide answers to the utilities, the public authorities and
the consumers of energy. Examination of the role of the different instruments, control and command regulation, taxation, voluntary agreements and their feasibility and acceptance is one of our mandates. It offers the advantage to put into practice and to make operational the vision that we had at the start of the work.
An important point is the willingness of the EC to apply the modelling tools both to the definition of our policies and to the current practice of the actors in the energy sector. This is indeed my first message.
My second message is to point out the necessity of international co-operation in this regard. For global issues, a global answer has to be found, which means that the dialogue must be based on common objectives, concepts and tools.
This Symposium, organized by the IAEA in collaboration with other inter- national organizations, illustrates this necessity. I congratulate the organizers, and I also welcome the participants; their participation means that they are motivated to work with us on the basis of common views.
R. Stern Director,
Industry and Energy Department, World Bank (IBRD),
Washington, D.C., United States of America
The objective of my presentation is to give an overview of the medium and long term options and priorities for meeting the rapidly growing energy demand in developing countries and economies in transition while ensuring environmental sustainability. The investment needs associated with this growth are estimated to be of the order of US $ 150 000 million per year for the power sector alone and will need to be financed by a mix of national resource mobilization and international capital flows. The main messages I would like to convey to you are as follows: First, I agree fully with the statement of Dr. Blix that energy development is an essential prerequisite for economic development. Second, coal will still account for about one third of the world energy use by the year 2020, despite improvements in energy efficiency and the greater use of renewable energy technologies. Finally, the World Bank feels strongly that financial sustainability through reform of the power sector and sound electricity pricing are prerequisites for environmental sustainability.
How large will the energy demand be and what are the determinants of energy growth?
The total world energy demand will depend on population growth and the per capita energy consumption. The population growth is uncertain, but it is clear that the world is on the verge of a major threshold in comparison with historical rates of growth. The base case projection used by the World Bank shows an increase from the current population of about 6000 million persons to roughly 12 000 million persons by the year 2100, and this is the assumption behind the following projections.
The growth of the per capita consumption will take place in the developing world, but it is assumed that by the year 2030 the per capita energy consumption in the developing world will still be only about one third of that in the developed world. Some might say there is no need for the developing world to follow the energy intensive path followed by the developed world, but even in that case there will still 15
be a major difference between developing and developed countries by the year 2030.
The energy use in the OECD countries will remain unchanged, with the additional energy needs in the developed world probably being met solely through efficiency gains. In the developing world there will be a very rapid increase in energy use.
Under the above mentioned assumptions, the total primary energy consumption in developing countries is expected to equal that in OECD countries by the year 2000;
by the year 2030, the primary energy consumption in developing countries will be 2.5 times greater than that in OECD countries. I want to make clear that this is an energy efficient scenario; if we do not see major gains in energy efficiency, both on the supply side and the demand side, the picture will be different. In fact, our projec- tion is that, by the year 2025, without a price reform, we would have to install in the developing world the equivalent of the entire present OECD capacity. Thus, implementation of a price reform and improvement of supply and demand side efficiency are absolutely essential components of environmental sustainability.
Pollutants
We now discuss briefly some of the environmental pollutants. What are some of the sources of these pollutants and what are the impacts if pollution is not abated?
At four main levels, there are:
— Indoor pollution originating primarily from cooking fires and resulting in high levels of respiratory illness;
— Local outdoor pollution in urban areas in the form of particulates, effluents (both solid and liquid from power plants), smog, and lead compounds from gasoline, causing increased illness and environmental degradation;
— At the regional level, acid rain from S02 emissions, leading to deforestation and reduced agricultural productivity;
— At the global level, a potential for climate change through the greenhouse effect, which in turn is caused primarily by C02 emissions.
It is fashionable in this era to focus attention on global warming, and clearly we will have to do this in the long term, but we must not forget that the most debilitating diseases due to environmental impacts are caused by local pollution. For low income people in developing countries, in both urban and rural areas, indoor pollution is a major health hazard. I was recently in China, and I was again reminded of the danger of local effluents without proper environmental control. It accounts for massive cancer rates as well as very high rates of respiratory diseases; these problems must have high priority generally. Indoor pollution is also a major problem, particularly in the developing world. A typical example in the developing world is the normal cooking arrangement — an open fire inside the house — with massive impacts on the health of individuals. The use of improved stoves leads to significant reduction of indoor pollution.
Regional pollution
To address the problems of growing S02 emissions, the World Bank, the Asian Development Bank and the International Institute for Applied Systems Analysis (IIASA) are working together with a network of about one hundred Asian scientists in the RAINS-Asia project to analyse the impact of S02 dispersion and sulphur deposition. The RAINS-Asia project models the impacts of growing energy consumption, especially S02 emissions and dispersion from sources throughout the region. The impact of sulphur deposition on 31 terrestrial and aquatic ecosystems is estimated according to dose response functions based on previous scientific studies.
In some locations, the rate of sulphur deposition already exceeds the local capacity of ecosystems to absorb the acid rain arising from S02 emissions. At present, China is most severely affected and will further suffer from the consequences of these emis- sions because of its high dependence on indigenous coal, even under a scenario of high substitution and high energy efficiency. A recent study, financed by the Global Environment Facility (GEF) on alternative strategies for greenhouse gas abatement, estimated that by the year 2020, even under this scenario, China will still rely on coal for two thirds of its primary energy requirements. If there are no controls on S02 emissions, then, according to current projections of the growth in energy consumption, the situation will be critical throughout most of South and East Asia by the year 2020. With modest controls, leading to reductions of S02 emissions of about one half of those targeted for Europe and North America, the situation in the year 2020 would be roughly the same as that in the year 1990, although the situation in India would be worse than the present one.
Options for a reduction of pollutant levels
The first option for a reduction of pollution levels is obviously an increase in energy efficiency on both the supply side and the demand side; this would involve very major institutional and policy reforms and investments in efficient technologies.
Fuel substitution will also be extremely important, particularly substitution of natural gas for coal and oil, as well as substitution of modern fuels for firewood and dung.
Finally, in the longer term, we will have to apply new technologies, such as the use of 'clean' coal and fuel cells, solar power and other renewables, improved fuels for vehicles and emission controls. These measures are not mutually exclusive nor are they substitutes for each other. They are all complementary and, taken together, they can reduce energy related pollution to sustainable levels. I think we have to recognize that this will take time, but it is very important that we move towards developing such technologies, because in the long term they have to provide solutions to our problems. The introduction of pollution reducing practices depends on policy choices among a mix of options, and on technology choices and investments. The appropriate mix of policies and technologies will depend on the situation of each country, its
resource endowment and the inevitable trade-offs required to achieve economic development objectives while ensuring environmental sustainability.
How much can energy efficiency achieve?
The World Bank policy for energy development puts emphasis on improve- ments in energy efficiency, but this does not mean just installing compact fluorescent light bulbs.
In Pakistan, by the year 2000, the energy efficiency programme is expected to save about 2500 MW or about 15% of the projected peak load of 14 500 MW.
About one third (32%) would be from supply side measures (power plant efficiency improvements, transmission and distribution loss reduction). About two thirds (68%) would derive from demand side savings, with more than one half of these savings coming from pricing measures, such as time of day pricing for industrial consumers and improved tariff structures for residential and agricultural consumers. The remaining measures are associated with technical improvements, involving invest- ments in more efficient end-use equipment. We should not forget that in the develop- ing world the average energy prices are still only 50% of the long term marginal cost. If we could raise those prices, if we could influence these price increases to lower the demand curve, and if we could introduce peak pricing — something that is still very difficult to do in the developing world, we could achieve half of the gains from these measures, just by shifting the peaks.
Fuel substitution: natural gas
Gas is a very attractive fuel and the environmental benefits and convenience are such that it becomes the fuel of choice where it is available. Natural gas is abundant and has good environmental characteristics, such as low NOx, low SOx
and low C02 relative to coal, and no particulates. The difficulty is that gas is not always available where it is needed; hence gas trade via pipelines or as liquefied natural gas (LNG) is essential. Large, if not huge, investments are required for this, as well as a great deal of international co-operation and a long time period for development. The climate change potential of unburned natural gas is thirty times greater than that of the equivalent amount of coal. As a result, an approximately 5%
leakage rate in gas pipelines would negate the benefits from greenhouse gas abate- ment by substituting gas for coal in a power plant. I was recently in Tokyo, where we are now talking about technical efficiencies of the gas combined cycle of around 60%, something that was quite unimaginable before; furthermore, natural gas has one third of the carbon emissions of coal. But again, as Dr. Blix mentioned, it is extremely important that gas is transported and used efficiently, since otherwise the gains associated with burning gas will be nullified. Nonetheless, gas is an extremely important fuel if we are to address the environmental problems in the medium term.
Fuel substitution and alleviation of poverty
Alleviation of poverty is one of the main objectives on the World Bank's development agenda. One half of the world's population relies on biomass for cooking. Rural populations and poor people in urban areas have no access to low polluting modern fuels and pay a high cost in terms of cash outlays and their own personal labour to procure fuels, and in terms of the degradation of their environ- ment. Biomass is at least five times less efficient than some of the commercial fuels.
What can we do to tackle these problems? A recent study by the World Bank concerning energy strategies for rural and poor people in the developing world reviewed the experience gained from previous approaches to improving access to energy and recommended a significant revision of strategies. First, it is very impor- tant to increase the choice for consumers in order to give them the option of spending their limited cash on other fuels. As we have seen earlier, much can be done to increase the energy efficiency of traditional appliances, and much research and application is needed in that area. Reducing the cost of fuel switching is also extremely important. A liquefied petroleum gas cooking ring, even though it may cost only US $25, is beyond the means of many poor people in developing countries.
Therefore, special credit schemes and other mechanisms will, in our view, have to be developed so that we will be able to reduce that initial cost of fuel switching.
I think, fuel switching is easier in the power sector. We can introduce lifeline tariffs, and we can amortize over a period of time the cost of connecting new consumers, which is also essential, rather than full payment at the time of connection. Finally, we have to level the playing field. It is sometimes forgotten that many barriers to possible alternatives are put up. Very often, there are significant trade barriers, significant tariffs or import quotas, particularly for photovoltaic (PV) systems, which should now become quite competitive in areas that are not connected to the national grid. It is interesting to note the experience in Kenya in the last few years, where the Government did level the playing field and did remove some of the barriers to the import of PV systems, with a consequent explosion in the provision of PV systems in rural areas. A whole industry has formed in Kenya, consisting of small scale suppliers who supply PV systems to the rural population and provide service of these systems. This was made possible by levelling the playing field and by correcting the anomalies in the trade regime.
The clean technology initiatives of the World Bank
The World Bank has launched several initiatives to accelerate the transfer of clean technologies to developing countries. These initiatives call for increased promotion and facilitation of project financing in order to increase trade in gas and commercially viable clean technologies. There are also technologies, such as clean coal technologies and fuel cells, which are in the early stage of commercialization.
